Wednesday, October 31, 2007

Oil jumps over $2 as crude supplies drop

Unexpected decline comes despite fall in refining activity; gasoline, distillate supplies rise.

NEW YORK ( -- Oil prices jumped over $2 a barrel Wednesday after the government said supplies of crude oil fell unexpectedly despite a drop in refining activity.

U.S. light crude for December delivery rose $2.67 to $93.05 a barrel on the New York Mercantile Exchange. Oil had traded 85 cents higher just prior to the report's release.

In its weekly inventory report, the Energy Information Administration said crude stocks fell by 3.9 million barrels last week. Analysts were looking for a gain of 100,000 barrels, according to a Dow Jones poll.

But the drop in crude stocks came at the same time that refiners scaled back operations, running at just over 86 percent capacity.

Distillates, used to make heating oil and diesel fuel, rose by 800,000 barrels while gasoline supplies increased by 1.3 million barrels. Analysts were looking for a 1 million barrel drop in distillate supplies and a 400,000 barrel gain in gasoline stockpiles. Top of page

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